For decades, contractors and small business owners have been stuck with a $600 threshold for issuing 1099-NEC forms, a number that hasn’t budged since 1954.

That’s finally changing.

Starting in 2026, the IRS will raise the filing threshold to $2,000 for payments to independent contractors (and yes, that includes your subs).

Then, beginning in 2027, it’ll be indexed for inflation in $100 increments.

Although that makes things easier (less 1099-NECs to issue and track), this doesn’t mean you can stop keeping good records.

If the IRS audits and finds you’ve misclassified a worker, penalties can still double what you’d owe.

Also, remember — if you pay your subcontractors via PayPal, Venmo, credit card, or debit card, you don’t issue a 1099-NEC at all.

Those are reported by the payment processor on a 1099-K instead.

Also remember to get a W-9 prior to work beginning, or risk never being able to obtain one!

If you’re interested in learning further, book a time and let’s chat: accountingsolutionsllp.com/appointment